APEC
Also called: Asia-Pacific Economic Cooperation · Topic: International Trade Policy, WTO and Intellectual Property · NCERT: Beyond NCERT
Meaning
APEC (Asia-Pacific Economic Cooperation) is a forum of economies around the Pacific Ocean, set up in 1989. It works to make trade and investment between its members freer. Its members are called "economies", not "countries", so that places that are not full states can also join. APEC commitments are non-binding: each member chooses its own steps, and no member can be punished for falling short. APEC is the standard example of open regionalism. This means a group cuts barriers among its members without raising barriers against outsiders. India is not a member.
Example
Under APEC, a member economy can announce its own plan to cut tariffs or simplify customs. It is judged only by peer review from the other members, not by any court. APEC's yearly leaders' meeting also gives heads of government a place to hold side meetings with each other outside the formal agenda.
Don't confuse with
- RCEP: a binding mega-regional trade agreement (a large trade deal covering many economies) with 15 members, under which signed tariff cuts are legal duties. India walked out of RCEP in November 2019. APEC has no binding treaty at all.
- Customs union / FTA: these remove tariffs among members under a signed agreement, and a customs union also sets a common external tariff (one shared tariff on imports from outside). APEC has neither a signed agreement nor a common tariff.